Nelnet Announces Acquisition of Student Loan Portfolio and Related Assets from Chela

Nelnet, Inc. and Chela Education Financing, Inc. announced today that they have entered into an agreement that provides for Nelnet’s acquisition of assets from California-based Chela, including an approximately $2.3 billion student loan portfolio, related servicing and origination assets, and rights to the Chela brand. The cash transaction is expected to close in the fourth quarter of 2005, subject to normal regulatory approval and closing conditions. Nelnet plans to finance the acquisition of the student loan assets through existing student loan warehouse facilities.

“Chela has been a respected provider of higher education financing to students and families in California for more than 25 years,” said Steve Butterfield, Nelnet Vice-Chairman and Co-Chief Executive Officer. “This transaction will allow Nelnet to expand our presence on the West Coast, as well as increase our student loan portfolio.”

The Chela portfolio to be purchased by Nelnet consists of student loans held by Chela that were originated under the Federal Family Education Loan Program (FFELP) of the U.S. Department of Education, as well as certain additional FFELP loans currently in the disbursement process that will be acquired at a later date. Nelnet will also acquire the related servicing assets, including the lease on a servicing and origination center in Mesa, Arizona, used to service approximately $700 million of the Chela portfolio. The Mesa location will continue to provide education financing services to both Chela and Nelnet borrowers. The agreement also provides that Nelnet will acquire the rights to originate student loans under the Chela brand in the marketplace.

“Our commitment to putting the interests of students first has allowed Chela to become one of the fastest growing education finance providers in the industry over the past three years. We are excited that Nelnet shares our commitment to students and will bring additional resources, products, and services to students and schools,” said Douglas Dolton, President and Chief Executive Officer of Chela Education Financing. “Our customers and school partners will be the ultimate winners in this transaction.” The Chela and Nelnet transaction will substantially complete the funding of The Education Financing Foundation of California, the largest education foundation in California.